The Effect of Board Diversity and Corporate Performance in Malaysia: Pre- and During COVID-19 Pandemic

Abstract

The objective of this study, which is based on the upper echelon theory, managerial networking theory and agency theory, is to investigate the influence of board diversity on the performance of Malaysian Pharmaceutical Listed Companies. The information was gathered from pharmaceutical businesses listed on the Bursa Malaysia Berhad from 2015 to 2020. Because the data comprises observations on distinct company parts throughout time, the fixed effects model is used to address the endogeneity problem. We discovered that gender diversity, board size, and foreign directors as evaluated by Bhattacharya's index have a favorable and significant effect on Pharmaceutical-listed firm performance for both accounting and market measures after controlling for many firms and board characteristics. In Pharmaceutical-listed firms, independence, diversity, meeting, and expertise do not appear to be important determinants of corporate performance. The findings confirmed the efficient monitoring hypothesis and management networking theory, which propose that director variety minimizes managerial entrenchment on the one hand, while networking boosts firm resources on the other.

Gender matters: board gender diversity and firms’ export resilience

“…Against the backdrop of the 2008 global financial crisis, both Chen et al (2019) and Papangkorn et al (2021) found that board gender diversity can effectively stave off declines in firm performance and may even enhance it. Similarly, Shamsudin et al (2022), Amorelli and García-Sánchez (2023), in the context of the COVID-19 pandemic, concluded that board gender diversity holds promise in bolstering firm performance and mitigating the extent of setbacks experienced by firms. Additionally, Azeem et al (2023) examined the impact of board gender diversity on firm financial resilience during the COVID-19 pandemic, suggesting that while it brings diverse analytical perspectives, it may also lead to internal conflicts.…”